Month: February 2017

Instability in Tamil Nadu

There is many a slip between the cup and the lip.
So it was for V. K. Sasikala, also known as Sasikala Natarajan, who was close to becoming Chief Minister and missed.
On 5/2/2017 AIADMK MLAs elected Sasikala their leader and she was expected to become CM on 7 or 9 of February. O. Panneerselvam resigned as CM of Tamil Nadu and Governor C. Vidyasagar Rao accepted his resignation on 6 February. Tamil Nadu does not have a full Governor. C. Vidyasagar Rao is Governor of Maharashtra who holds additional charge of Tamil Nadu. He was in Maharashtra. His presence was needed for swearing-in of Sasikala. Meanwhile Panneerselvam continued as caretaker CM.
Many in Tamil Nadu were not happy on Sasikala becoming CM. They expressed their displeasure in social media. Supreme Court said it will announce the judgment in Disproportionate Assets case involving Sasikala next week. On the night of 7/2/2017 Panneerselvam went to the tomb of Jayalalitha and meditated there for some time. After that he said his resignation was coerced. Some MPs and MLAs switched sides. On 8/2/2017 Sasikala took majority of MLAs to a resort.
Vidyasagar Rao came to Madras on 9/2/2017. He met Panneerselvam and Sasikala. He consulted lawyers.
On 14/2/2017 Supreme Court delivered its judgment. There was talk of two separate judgments from Supreme Court judges in DA case. There was possibility of one judge acquitting and another judge convicting Sasikala. That did not happen. Sasikala was guilty. She has to go to prison. After prison term she cannot contest elections for six years. Supreme Court did not grant Sasikala’s wish for more time to surrender.
Many have questioned the role of Governor. Some wanted him to swear in Sasikala. Some said he should wait for Supreme Court judgment. After the Supreme Court judgment Sasikala was out of the equation. She made Edappadi K. Palanisami leader of her faction. Some see BJP hand in Governor’s action. Some are unhappy that Tamil Nadu does not have a full Governor. Since Modi became PM many Governors have held additional charges. It seems BJP does not have enough persons who can be Governors. Every state in India should have a full Governor.
In January Tamil Nadu was in news because of jallikattu. This month it was because of uncertainty about CM.
Panneerselvam wants to turn Jayalalitha’s residence into a memorial. That will prevent Sasikala’s family from occupying it. Sasikala has lived there for many years.
Sasikala going to jail did not result in MLAs with her switching to Panneerselvam. There is uncertainty about his future as CM. If Palanisami becomes CM he too may not last long. It seems Tamil Nadu will have President’s Rule followed by fresh elections. It is sad if a government falls within a year. We need to have Presidential System to have stable governments and avoid dissolution of Legislative Assemblies and House of People.

Budget 2017

On 1/2/2017 Finance Minister Arun Jaitley presented budget for 2017-18. It is the first time budget was presented on 1 February. This time Railway Budget was incorporated into budget. Opposition parties wanted postponement of budget due to elections in UP, Punjab, Manipur, Goa and Uttarakhand. Government did not agree. The matter went to Supreme Court. Supreme Court upheld government’s decision to present budget on 1 February. On 31/1/2017 E. Ahamed, MP and former member, collapsed and taken to hospital. Congress wanted postponement of budget by a day because a sitting member of Lok Sabha had died. BJP said in 1974 when an MP died budget was presented as scheduled. Sumitra Mahajan said budget will go ahead and 2/2/2017 will be a holiday. If Congress members wanted a holiday they should have walked out after obituary reference.
Expected expenditure for 2017-18 is 21 lakh crore rupees. Cash in India as on 8/11/2016 when demonetisation was announced which proved to be a disaster was 18 lakh crore rupees. Expected expenditure is 3 lakh crore rupees more than that. There is still limit of 24,000 rupees on withdrawal from savings bank accounts. Things were supposed to be normal by 30/12/2016. It is not normal even after one month after that date. Election Commission wanted RBI to lift withdrawal limit from savings bank accounts to enable candidates to pay in cash. RBI withdrew limit on current accounts. If candidates want to withdraw 28 lakh rupees or so during election time they have to open current accounts.
There is reduction of Income Tax from 10% to 5% in 2.5 – 5 lakh rupees category and 12,500 rupees for income above 5 lakh rupees. There is 10% surcharge for income between 50 lakh and 1 crore rupees. There is some tinkering in direct and indirect tax rates.
Donations above 2,000 rupees to political parties have to be in cheque or digital. It was anonymous donations up to 20,000 rupees which is brought down ostensibly to ensure accountability and transparency. In reality anonymous donations up to 2,000 rupees is a loophole which political parties will exploit. BJP has not gone cashless and digital in accepting donations. Ban on anonymous donations to political parties, audit of accounts of political parties by CAG and bringing political parties under RTI are necessary to curb black money in politics.
Sensex went up 485 points. Usually if Sensex goes up during Budget Day it comes down during succeeding days and vice versa.
Ban on cash transactions above 3 lakh rupees is proposed. It remains to be seen how far the ban will be successful.
Cash donation to charitable trusts is limited to 2,000 rupees.
Abolition of Foreign Investment Promotion Board is good.
More than half of Modi government’s term is over. There were great expectations when he became PM. Not much changed under him. Things are worse in recovery of bank loans. MNREGA continues and more money is given to it. Schemes with freebies and subsidies continue and more get added. Current account deficit, fiscal deficit, and revenue deficit continue. Rupee has depreciated more. India is just four ranks up in ease of doing business. Credit rating has not changed much. This year in Davos there was no talk of India. There is not much difference between Congress budgets and BJP budgets. If Modi thought he had ten years he was mistaken. Victory in elections is not to be taken for granted.